The yield curve added some 3 bps, mainly in the middle and the long-term segment. There was no domestic incentive yesterday, therefore the bonds mainly tracked core markets, which retreated. Nevertheless, the losses of Czech bonds were once more slightly lower than German Bunds. Moreover, some investors waited for today’s 2-year auction. The key event today is the auction. The Finance Ministry offers CZK 8 bn of the bonds. There might be high demand, since the maturity is pretty short. Short-maturity auctions are not highly significant for the market sentiment, thus development in the region and on core markets may set mood again. Traders may shrug off industrial output because it’s release before the auction and industrial data is not reliable now.
(CSOB - Investment research)